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$46k Spent on Bitcoin Mining Hardware: The Final Reckoning

(@scurlock_jg) | Published on July 27, 2014 at 16:55 BST

In the two previous articles of this series, Dario Di Pardo listed the highs and lows of having spent many thousands of dollars on pre-ordered bitcoin mining hardware and then having to endure delays, poor communication and broken promises, as some of the companies failed to provide the promised equipment in time.

In this last part of the series (see one and two here), Di Pardo tells CoinDesk which companies finally came good on their promises and which left him wishing he'd just spent his bucks on bitcoin. Di Pardo told CoinDesk, if he had one learned one thing from the experience, it was: ¨No more pre-ordering for this guy.¨

Mining shaft

Prospero X3Vendor: Black Arrow
Product: Prospero X-3 (converted to bare chips)
Price including shipping: $4,978
Order date: 18th November 2013
Anticipated shipping date: 24th February 2014
Actual shipment date (chips): 11th July
Delay: 5 months
Status: Converted to ASIC chips

As somewhat anticipated, Black Arrow missed their revised shipment date of 8th May.

According to the company, they have been experiencing issues concerning the miner’s backplane, which are causing almost two months of additional delay.

Black Arrow recently announced the issues to be resolved and that both X-1 and X-3 miner orders would be dispatched by the end of July.

Together with the company’s latest news update, the option to convert pre-ordered miners into bare ASIC chips was provided, implying that each X-3 order could be exchanged for 100 ASIC chips, whereas you would get six chips for an X-1 order.

When a mining company starts offering a miner-for-chips exchange, it might be a good idea to go with the offer, or you could end up with nothing at all, as I learned from my experience with HashFast. With this in mind, together with the now huge delay in shipment and the fact they are not increasing compensation further to match competitors’ prices at shipment time (which they said they would do earlier), I decided to go for the chips.

Obviously, one cannot mine with chips alone. Fortunately, Technobit, a Bulgarian company, would be capable of turning these chips into mining rigs, where each 400 GH/s rig would contain four ASIC chips.

Because Minersource, a mining gear and co-location company as well as Black Arrow’s US-based reseller, organized a group buy for all customers who converted their order into chips, the board assembly at Technobit can now be purchased at a discount. Even more, they managed to provide us a deal where each board assembly can be alternatively paid for with four additional chips.

So with some money on top for chip coolers, controllers and power supplies (controllers and power supplies not necessary when opting for co-location), I would get a 5 TH/s miner with a price tag that matches today’s stock prices, instead of the now overpriced 2 TH/s X-3 miner (excluding the 1 TH/s compensation Black Arrow would send after all current orders have been shipped).

Technobit is currently in the process of assembling all miners for the group buy, which will take about two weeks to complete.

Although none of the X-3 orders have been currently shipped, some X-1 customers are now reporting receiving their hardware.

HashFast Sierra minerVendor: HashFast
Product: Sierra (1.2 TH/s)
Price including shipping: $6,696
Order date: 18th November 2013
'Guaranteed' delivery date: 15th February 2014
Status: Bankruptcy announced 7th June (no product or refund received)

Not surprisingly, HashFast entered bankruptcy under chapter 11 on 7th June.
As a result and most unfortunately, when that ship went down, my money went down along with it.

Because I initially wasn’t included in the list of creditors the company presented to the bankruptcy Trustee (no surprise there either), I filed my claim online through the court’s site.

I can only hope at this point that as a result of the reorganization process, I will get at least some of my money back.

fast-hash one platinumVendor: Virtual Mining Corporation (VMC)
Product: Fast-Hash One Platinum Edition (1 TH)
Price including shipping: $6,479
Order date: 24th November 2013
Anticipated shipping date: January 2014
Status: Refunded 23th June

In addition to the Wood Law Firm investigation, Virtual Mining Corporation and its parent company Active Mining Company are now under investigation by the Missouri Secretary of State because the CEO of both companies, Kenneth Slaughter, wasn’t following proper procedures when soliciting investors.

Maybe as a result, shortly after this announcement the company’s website went offline and is now only displaying a refund form intended for former customers.

After applying for my refund using this form, I almost immediately got the order amount transferred to the bitcoin address provided.

Although glad I made it out if this adventure with only some minor remaining health issues, I feel sorry for the many customers still waiting for their money.

If the company will manage to ever get back on its feet, is yet to be seen.

Coincraft minerVendor: Bitmine
Product: CoinCraft Desk 1 TH/s (+ 0.4 TH/s compensation unit)
Price including shipping: $5,758
Order date: 28th November 2013
Anticipated shipping date: February, week 1
Actual shipping date: 2nd April
Delay: 7 weeks and 2 days
Status: Miners performing well

Bitmine has manufactured some sturdy mining hardware, with both the 1 TH/s Desk and the 0.4 TH/s compensation unit I received hashing continuously and flawlessly for over three months now.

However, because of the delays in shipment of the CoinCraft Desk and CoinCraft Rig that resulted in many disappointed customers, the company is struggling to keep afloat.

Due to the many refund requests which caused a shortage of funds, Bitmine is now postponing further refunds to customers till as far as October, much to the their frustration – a similar situation CoinTerra customers have been facing.

To raise the necessary funds to survive, the company is now offering hosted mining plans and a revised, lower priced 1 TH/s CoinCraft Desk.

knc, neptuneVendor: KnCMiner
Product: Neptune (converted to 3 TH/s Jupiter)
Price including shipping: $10,175
Order date: 2014-01-07
Anticipated shipping date: Q2 2014
Actual shipping date: April 29th
Delay: None
Status: Miner repaired

The repair process of the seven broken boards was fairly smooth and a few days after sending back to KnCMiner the broken ones, I received new boards – properly packed this time.

The 28nm Jupiter miner I took in exchange for my Neptune order now hashes away steadily at about 3.1 TH/s while consuming around 3,800 watts at the wall, which averages out to about 1.22 W/GH/s.

The new 20nm Neptune miner that has been shipping as of the end of June, hashes at around 3.3 TH/s while only consuming half the power per gigahash than its younger brother does.

Despite the efficiency improvement and the fact that Neptune customers – at least those who took the time to read the offer’s small print – will additionally receive a compensation unit in August, I don’t think I made too big of a deal when converting my order after all, as I got the Jupiter rig two months earlier.

Alpha Viper minerVendor: Alpha Technology
Product: Viper (Scrypt) Miner (250 MH/s)
Price excluding shipping: £5,450 ($8,984)
Order date: 2014-01-10
Anticipated shipping date: July 2014
Delay: None

Alpha Technology eventually announced further increasing the performance of both available Scrypt miners, to match competitor products at shipment time.
The 18 MH/s Viper will now be performing at a minimum of 50 MH/s, whereas the 90 MH/s miner will be hashing at a minimum of 250 MH/s.

While approaching the July shipment deadline, the company went awfully quiet.

Whether this will prove to be a positive thing, has yet to be discovered.

CoinTerra TerraMiner IVVendor: CoinTerra
Product: TerraMiner IV 2 TH/s (converted to 2x 1.6 TH/s)
Price including shipping: $7,253
Order date: 2014-01-12
Anticipated shipping date: May 2014
Actual shipping date: 29th May
Delay: ‘None’
Status: Converted to 2x 1.6 TH/s miners

After still not getting any replies to my emails I sent to the CoinTerra support team asking for a (partial) refund, I took a hint from one CoinDesk commenter and decided to call them instead.

The experience turned out to be pretty similar to participating in a telephone game where you’d have to be the 100th caller in order to win a prize, except that you’d probably win said prize sooner than someone from CoinTerra actually answering the phone.

However, when you get a hold of somebody eventually, you realize the company has some great support representatives working there who really care about your case.

But as time IS money in this business, the company really ought to expand its support staff in order to limit customer frustration.

After a long period of mailing and calling back and forth I took the presented offer of getting an additional TerraMiner IV (1.6 TH/s) for an extra $1,000. Additionally, I opted for the cheaper (ground) shipment option instead, to reduce the extra costs.

Getting two miners for a total of $7,000 excluding shipping costs wasn’t the best offer after all, as a few days after I accepted the deal, you could buy a single, now in stock TerraMiner for $3,000.

My pre-order was finally sent out on 29th May, 7 weeks after they began shipping from stock.

After about 10 days of operation one TerraMiner broke down and had to be sent back for repair. As a result, I lost about a month of (precious) mining time from this machine.

To this day, the hashrate of both rigs combined remains unstable, varying between 2.7 and 3.0 TH/s.

Bitmain AntMiner S3

Vendor: Bitmain
Product: AntMiner S3 batch 1
Price including shipping: 0.75 BTC
Order date: 2014-06-30
Anticipated shipping date: 20th July
Actual shipping date: 20th July
Delay: None
Status: Hashing

To discover what all the fuss was about, I decided to order the latest AntMiner from Bitmain.

The S3, a product that has been selling like hotcakes since its release, reaches hashrates up to 441 GH/s while consuming merely 340 watts from the wall.

No surprises, no delays, no tricks, but plain getting what you paid for, as you would expect from any other decent company.

Bitmain even offered compensation in the form of a 10% coupon or seven percent refund, because actual specifications were slightly off initial specifications.

Mining image via Shutterstock

Alpha TechnologyBitmainBlack ArrowHashFastKnCMinerMining

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